JOSEPH Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) The claim of the applicant in this case is that provident fund amount payable was admitted by the Liquidator only under S.529A of the Companies Act. It is the contention of the applicant that in view of S.11 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (in short 'EPF Act') first charge should be given to the provident fund dues and, therefore, dividend cannot be apportioned in pari passu with the secured creditors as S.11 will prevail over the provisions of S.529A. It is also contended that the Industrial Tribunal has awarded that workers are entitled to salary during lay off period. Even though salary for lay off period as directed by the Tribunal was admitted by the Official Liquidator, the provident fund dues on the salary paid during the lay off period was not admitted by him.

(2.) The first question to be considered is whether the stand of the Official Liquidator is correct in not admitting the claim for provident fund contribution on salary awarded by the Industrial Tribunal as Tribunal's award was subsequent to the winding up order and salary became due after winding up payment. According to the Industrial Tribunal, lay off was illegal and workers are entitled to salary. With regard to the contention that provident fund ought to have been deducted from the salary payable, I am of the view that it has got considerable force. It is true that winding up order was passed subsequent to the period of lay off and award of the Tribunal was subsequent to the winding up order. The lay off which was held to be illegal was before winding up. Salary ordered to be paid by the Tribunal is therefore 'wages' as defined in S.2(b) of the EPF Act and it was emolument 'payable' during the period of lay off. The remuneration payable during lay off period is not excluded in the definition. Here Tribunal held that lay off was illegal. Therefore, what was directed to be paid is salary itself. S.2(b) of the Employees' Provident Fund Act says as follows:

(3.) S.529A of the Companies Act reads as follows: